Pillai and Anr Vs. State of Kerala  Insc
295 (20 April 2004)
Raju & Arijit Pasayat. Arijit Pasayat,J
Pillai (hereinafter referred to as 'accused') as appellant questioned
correctness of the judgment rendered by learned Single Judge of the Kerala High
court upholding his conviction under Section 5(2) of the Prevention of
Corruption Act, 1947 (in short the 'Act') and Section 409 of the Indian Penal
Code, 1860 (in short the 'IPC'). For the offence under the Act, he was
sentenced to undergo rigorous imprisonment for two years and to pay a fine of
Rs.1,00,000/- with a default stipulation of 6 months imprisonment and sentence
of one year for the offence under the IPC. Since he died during pendency of the
appeal, his legal representatives sought for impletion and have been impleaded.
which led to trial of the accused are essentially as follows:
accused was employed in the Civil Supplies Department in the rank of Assistant Taluk
Supply Officer. He was working as Junior Manager on deputation in the Kerala
State Civil Supplies Corporation (in short the 'Corporation'), at Kowdiar.
While he was functioning as such, by Ex.P-19 order dated 14.4.1983 of the
Regional Manager, of the Corporation, Thiruvananthapuram, he was appointed as
Unit Manager of the Corporation, Unit Punalur. Pursuant to the orders he took
charge as Unit Manager in the Punalur Unit. His 5 years deputation to the
Corporation was to be completed on 30.6.1986. But, instead of relieving him,
the Corporation had requested the Civil Supplies Department to extend his term
of deputation by one year stating that certain liabilities were outstanding.
But later, the request for extension of deputation was limited upto 30.11.1986
by Ext.P-38 letter dated 4.11.1986 from the Managing Director of the
Corporation to the Director of Civil Supplies, Board of Revenue. By the same
letter, the Regional Manager of the Corporation, was directed to relieve the
accused to his parent department on 30.11.1986 itself. Pursuant to the
direction, the Regional Manager issued Ext.P-20 order dated 29.11.1986
relieving the accused effective from the afternoon of 29.11.1986. However, the
accused did not hand over charge on 29.11.1986. He did not attend the office
after 27.11.1986, but applied for leave. As he did not attend the office on
29.11.1986, the Regional Manager by Ext. P-22 dated 1.12.1986 permitted Natarajan
Asari (PW-3), the Senior Assistant in the Punalur depot to assume charge
effective from that date. Accordingly, PW-3 assumed charge of the depot and
this was reported by the Regional Manager to the Managing Director of the
Corporation by Ext. P-23 dated 4.12.1986. The stock of the Punalur Depot were
partly stored in the Warehousing Corporation godown at Punalur and partly in
the godown attached to the office, referred to by the witnesses as self-godown.
Though PW- 3 assumed charge, the accused had not handed over the keys of the godown
or verified the stock. Thereafter the accused reported in the depot on
13.12.1986 and in the presence of the then Assistant Manager (Accounts) (PW-2)
in the Regional Office of the Corporation, brought the keys and opened the godown.
He also undertook in writing by Ext.P-24 to hand over charge on the 13th, 15th
and 16th December, 1986. In the presence of the accused the items found in the godown
were verified. Only the stock of 21.875 quintals of M.P. boiled rice and 84 kg.
Of tamarind were found in the self-godown. A stock statement was also obtained
from the State Warehousing Corporation. The Managing Director of the
Corporation directed a special audit to be conducted by PW-1 who was then
working as an Assistant Manager in the Internal Audit Wing of the Corporation
on deputation from the Accountant General's Office. Accordingly, PW-1 conducted
a special audit and Ext.P-1 was prepared.
in the State Warehousing Corporation godown as also the self-godown were
verified as on 31.3.1986. As per Ext.P-2 stock verification report, there was
an actual stock of 37.8 quintals of Palmolein and 44 quintals of free sale
sugar. Subsequent to 1.4.1986, 100 quintals of paper boiled rice were
transferred from the Warehousing Corporation Depot to the self-godown, and
23.65 quintals were returned from the Onam markets in Punalur. Thus, the
physical stock should have been 123.65 quintals of boiled rice. But the actual
stock found was 21.65 quintals. Thus, there was a shortage of 102 quintals.
Similarly, a total quantity of 72 quintals of Palmolein had been transferred
from the State Warehousing Corporation godown to the self-godown as per Exts.
P9 and P11 goods transfer orders and Exts. P10 and P12 good transfer notes
signed by the accused. But, there was no stock of palmolein. There was a stock
of 46 quintals of free sale sugar as on 1.4.1986. Out of this 5 quintals had
been transferred to the Maveli Store, Punalur as per a consignment note dated
31.10.1986. The stock register showed a closing balance of 30 quintals, but no
stock was available in the godown. PW-1 assessed the total value of shortage of
rice at Rs.33,150/- that of palmolein at Rs.1,08,000/- and sugar at
Rs.22,620/-. He also reported that the accused had withdrawn loading and
transporting charges for these articles as per Exts. P13 and P14 series
vouchers. No irregularity was found in the transactions under Imprest, or in
the accounts regarding sales and remittance. There was excess stock in the
Warehousing Corporation godown as the ration dealers had not lifted and that
was tallied by 31.12.1986 also. By Ext. P-1, PW-1 fixed accused's liability
including infructuous expenses on transporting and cost of missing empty
barrels at Rs.1,70,640/-. On 29.12.1986 the accused undertook to remit
Rs.1,63,770/- being the value of the shortage of 72 quintals of palmolein, 102
quintals of rice and 39 quintals of sugar and in part payment, deposited
Rs.50,000/- in the Punalur Depot on that day. By Ext. P-17 he undertook to
deposit half the amount by 2.1.1987 and the balance by 31st March next year.
the matter was reported to the Board of Revenue and the accused was suspended
from service by Ext.P-37 order of the Board of Revenue, dated 31.1.1987. The
Managing Director of the Corporation wrote to the Director of Vigilance
(Investigation) along with a copy of Ext.P-1 report. The Director of Vigilance
(Investigation) sanctioned registration of a case. On the basis of the
direction the then Deputy Superintendent of Police, Vigilance, Kollam (PW-10)
registered a case as per Ext.P-39. He entrusted the investigation to Inspector
of the Kollam Vigilance Unit-I (PW-11), who conducted the investigation and
sent a report to his higher authorities. In the meantime, the accused retired
from service on 28.2.1992. Since he had retired from service sanction for
prosecution became unnecessary. The case was transferred to the newly
established Pathanamthitta Vigilance Unit. PW-12, the Deputy Superintendent of
Police, Vigilance, Pathanamthitta Unit who was put in charge of this case also
verified the records and filed the charge sheet.
the trial Court accused pleaded innocence.
witnesses were examined and 47 documents were exhibited for the prosecution to
further its case.
the accused did not examine any witness, documents were marked as Exts. D-1 to
D-5. The trial Court on consideration of materials held the accused guilty and
convicted him as afore-noted. The High Court in appeal confirmed the
conviction, and sentence.
support of the appeal, Mr. C.N. Sree Kumar, learned counsel submitted that in
the absence of a sanction for the prosecution in terms of Section 19 of the Act
and Section 197 of the Code of Criminal Procedure, 1973 (in short the 'Code')
the whole proceeding was non est and the trial was vitiated.
it was submitted that the prosecution has not established any mis-appropriation
and/or mens rea of the alleged crime and, therefore, both the trial Court and
the High Court have acted contrary to law. It was further submitted that both
the trial Court and the High Court proceeded on mere surmises and conjectures
to hold that the accused had committed mis- appropriation. The essential
ingredients necessary to prove the accusations under Section 409 IPC are
squarely absent. Additionally, it was submitted that both the trial Court and
the High court have attached undue importance to the fact that the
accused-appellant had agreed to pay the differential amount. Reliance was
placed on a decision of this Court in Jiwan Dass v. State of Haryana (1999 (2)
SCC 530) to contend that even if the accused had agreed to pay the amount that
was not material while considering the issue whether the ingredients have been
established by the prosecution. It is a case where the sanction which was
sought for was refused. The prosecution has acted unfairly in taking advantage
of the position that after retirement sanction is not necessary under the Act.
In any event, in respect of a retired employee sanction is necessary in terms
of Section 197 of the Code. Effort has been made to overreach and circumvent
law after retirement and such arbitrary action should not be countenanced.
Finally, it was submitted that taking note of the small amount involved and the
fact that the accused has already deposited the amount the benefit available
under the Probation of Offenders Act, 1958 (in short the 'Probation Act') can
be extended. Strong reliance is placed on a decision of this Court in Bore Gowda
v. State of Karnataka (2000 (10) SCC 260). It is pointed
out that though accused has died during pendency of appeal his legal
representatives have been impleaded and benefit available under Section 12 of
the Probation Act should not be denied to them.
response, Mr. Ramesh Babu learned counsel for the respondent-State submitted
that the Courts below have acted in accordance with law keeping in view the
correct principles and the factual scenario. Mis- appropriation is no part of
an employee's official duty and, therefore, the question of any sanction under
Section 197 of the Code does not arise. In any event, initially, the sanction
was not accorded because the accused had retired and had agreed to pay the
amount but that was not the final decision. In a case involving corruption it
would be against public interest not to proceed against the accused who is
guilty of mis-appopriating huge amount of stock meant for the people. The
Probation Act has no application to the cases covered under the Act.
the newly-worded Section 197 appeared in the Code with the words "when any
person who is or was a public servant" (as against the truncated
expression in the corresponding provision of the old Code of Criminal
Procedure, 1898), a contention was raised before this Court in Kalicharan Mahapatra
v. State of Orissa (1998 (6) SCC 411) that the legal position must be treated
as changed even in regard to offences under the Old Act and New Act also. The
said contention was, however, repelled by this Court wherein a two-Judge Bench
has held thus :
public servant who committed an offence mentioned in the Act, while he was a
public servant, can be prosecuted with the sanction contemplated in Section 19
of the Act if he continues to be a public servant when the court takes
cognizance of the offence. But if he ceases to be a public servant by that
time, the court can take cognizance of the offence without any such sanction."
The correct legal position, therefore, is that an accused facing prosecution
for offences under the Old Act or New Act cannot claim any immunity on the
ground of want of sanction, if he ceased to be a public servant on the date
when the court took cognizance of the said offences. But the position is
different in cases where Section 197 of the Code has application.
197(1) provides that when any person who is or was a public servant was not
removable from his office save by or with the sanction of the Government is
accused of any offence alleged to have been committed by him while acting or
purporting to act in the discharge of his official duty, no Court shall take
cognizance of such offence except with the previous sanction
the case of a person who is employed or, as the case may be, was at the time of
commission of the alleged offence employed, in connection with the affairs of
the Union, of the Central Government and
the case of a person who is employed or, as the case may be, was at the time of
commission of the alleged offence employed, in connection with the affairs of a
State, of the State Government.
mention that the Law Commission in its 41st Report in paragraph 15.123 while
dealing with Section 197, as it then stood, observed "it appears to us
that protection under the section is needed as much after retirement of the
public servant as before retirement. The protection afforded by the section
would be rendered illusory if it were open to a private person harbouring a
grievance to wait until the public servant ceased to hold his official
position, and then to lodge a complaint. The ultimate justification for the
protection conferred by Section 197 is the public interest in seeing that
official acts do not lead to needless or vexatious prosecution. It should be
left to the Government to determine from that point of view the question of the
expediency of prosecuting any public servant". It was in pursuance of this
observation that the expression 'was' come to be employed after the expression
'is' to make the sanction applicable even in cases where a retired public
servant is sought to be prosecuted.
position was highlighted in R. Balakrishna Pillai v. State of Kerala (AIR 1996 SC 901).
noted in State of M.P. v. M.P. Gupta (JT 2003 (10) SC 32),
sanction under Section 197 of the Code is not a condition precedent for an
offence under Section 409 IPC.
fairly well settled position in law that actual mode of entrustment or mis-appropriation
is not to be proved by the prosecution. Once entrustment is proved, it is for
the accused to prove as to how the property entrusted was dealt with. In Jiwan Dass's
case (supra) the factual position was entirely different. It was held that the
undertaking given in that case could not be held to be confession or admission.
In the present case, the factual scenario as noticed by the trial Court and the
High Court is different. It was not only on the basis of the undertaking that
the conviction was recorded, but the other evidence on record also unerringly
proved entrustment. Therefore, it was for the accused to prove as to how the
property entrusted with him was dealt with. No material was placed in that
regard. Therefore, the Courts below correctly held entrustment to have been
proved. The concurrent findings of fact recorded by the Courts below relating
to entrustment and mis-appropriation in our view are well merited and fully
justified on the basis of evidence on record and do not suffer from any
perversity or patent error of law to warrant interference.
to the plea relating to benefits under the Probation Act, it is to be noted
that Section 18 of the said Act clearly rules out application of the Probation
Act to a case covered under Section 5(2) of the Act.
there is no substance in the accused- appellant's plea relating to grant of
benefit under the Probation Act. The decision in Bore Gowda's case (supra) does
not even indicate that Section 18 of the Probation Act was taken note of. In
view of the specific statutory bar the view, if any, expressed without analysing
the statutory provision cannot in our view be treated as a binding precedent
and at the most is to be considered as having been rendered per incuriam.
Looked at from any angle, the appeal is sans merit and deserves dismissal which